Some economists contend that continued pallid growth, the decline in North Sea oil production and burgeoning trade deficits are signals sterling needs to depreciate further in order to restore its competitiveness.
It is hoped such a move in the exchange rate would boost economic growth and help rebalance the UK economy away from its reliance on the financial sector and consumer spending, and towards high-end manufacturing and other services. While devaluation could benefit the UK economy in the short run, it is no substitute for the long-term structural reforms so necessary for the UK to revive its competitive stature. Consequently, we feel more comfortable concentrating on high quality companies, with strong market positions, either in domestic structural growth areas or international markets....
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